Shares of SelectQuote (SLQT 42.62%) stock, which runs online compare-and-contrasts for choosing health, life, home, and automobile insurance policies, is off to the races Thursday morning, its shares surging 40.5% through 10:25 a.m. ET after soundly beating fiscal Q4 2025 earnings forecasts this morning.
Heading into the report, Wall Street forecast SelectQuote would lose $0.13 per share, and it did lose money -- but only $0.02. Sales were supposed to be $334.1 million, but came in at $345.1 million instead.
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SelectQuote Q4 earnings
So the good news is that SelectQuote didn't lose as much money as Wall Street thought it would. The better news, though, is that the only reason SelectQuote lost any money at all is that it paid dividends to holders of senior non-convertible preferred stock.
But for those payments, the company would have earned $12.9 million in profit.
That said, it's worth pointing out that free cash flow at SelectQuote still ran deeply negative in the quarter, as SelectQuote burned about $38 million in cash. (Fiscal Q4 2024 FCF was positive, by the way.)
Is SelectQuote stock a buy?
Investors may not have noticed this last detail just yet, but I admit it does give me pause -- especially in light of all the momentum buying that seems to be happening today.
Valued on GAAP earnings, SelectQuote stock certainly looks cheap enough to buy. With $48 million in trailing earnings and a market capitalization of only $444 million (after the run-up), SelectQuote stock trades for a seemingly low 9.2 P/E ratio. Free cash flow, however, has run negative in four of the past five years, and it's in the red again this year already.
If that number doesn't turn around again in a hurry, well, caveat investor.
